Bluerock Value Exchange has sold out the latest 1031 exchange program, BR Jefferson Place, DST, a Class A, 228-unit, apartment community located in Frederick, Md., near Washington, D.C. The $26 million equity offering, which was made available to accredited investors seeking to complete a 1031 exchange, was fully reserved in less than 90 days. BVEX ranked among the top-four sponsors of securitized 1031 exchange with more than $113 million in equity capital raised and more than $260 million in new property acquisitions in 2018. 

"Jefferson Place is adjacent  to the new mixed-use Tech Park and immediate access to the I-270 and DNA Alley Employment Corridor," said Josh Hoffman, president of BVEX. "The property's newer construction and top-of-the-market-amenities caters to an affluent resident base and has shown high occupancy levels which provides a great opportunity for stabilized current income, long-term rent growth and value creation potential for our investors." Built in 2017, Jefferson Place is a class A, midrise apartment community located within Maryland'sI-270 Biotech Corridor. The property consists of seven four-story residential buildings on around 7.5 acres. Residents can choose from amply-sized one, two, and three-bedroom units featuring high-quality construction as well as a South Beach inspired swimming pool with poolside grilling areas, a fitness center with a private-training room featuring Virtual Fitness on Demand, a game room with pool table and shuffleboard, and detached garages in select units.

Just four of the top-10 metropolitan areas for commercial and multifamily construction reported increased investment in 2018, according to Dodge Data & Analytics. The remaining six experienced decreases.

[caption id="attachment_5116" align="alignright" width="231"] Robert Murray, chief economist for Dodge Data[/caption]

The New York metropolitan area, at $28.7 billion in 2018, continued to be the leading market for commercial and multifamily construction starts, advancing 10% after its 13% drop in 2017. The New York share of the U.S. was 14% in 2018, up from 13% in 2017, although not as high as its peak 19% share reported in 2015.

The next three markets in the 2018 top-10 all showed gains relative to 2017 were Washington, D.C. ($9.5 billion), up 28%; Boston ($9.2 billion), up 72%; and Miami ($8.2 billion), up 19%. The remaining six markets in the top-ten with their declines relative to 2017 were Los Angeles ($7.0 billion), down 11%; Dallas-Ft. Worth, Texas ($6.9 billion), down 16%; Chicago ($6.7 billion), down 1%; San Francisco ($6.0 billion), down 18%; Atlanta ($5.7 billion), down 14%; and Seattle ($5.7 billion), down 14%.

Of the metropolitan areas ranked 11 through 20, seven reported gains while three reported declines. At the national level, the volume of commercial and multifamily construction starts in 2018 was $212.4 billion, up 4%--a moderate rebound after a 3% decrease in 2017.

For the metropolitan areas ranked 11 through 20, the seven the experienced greater activity in 2018 compared to 2017 were: Houston ($4.5 billion), up 9%; Austin, Texas ($4.0 billion), up 22%; San Diego ($3.1 billion), up 12%; Minneapolis-St. Paul, Minn. ($3.0 billion), up 16%; Phoenix ($2.8 billion), up 5%; Kansas City, MO-KS ($2.8 billion), up 46%; and Sacramento  ($2.3 billion), up 44%.

The three metropolitan areas in this group with decreased dollar amounts of commercial and multifamily starts in 2018 were Philadelphia ($4.0 billion), down 6%; Denver ($2.8 billion), down 23%; and Orlando ($2.6 billion), down 19%.

The commercial and multifamily data includes office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. Not included in this ranking are institutional building projects (e.g., educational facilities, hospitals, convention centers, casinos, transportation terminals), manufacturing buildings, single-family housing, public works, and electric utilities and gas plants.

The 4% increase for commercial and multifamily construction starts at the U.S. level in 2018 reflected greater activity for multifamily housing, up 8% to $95.1 billion, and the commercial building categories as a group, up 1% to $117.3 billion. Multifamily housing in 2017 had fallen 8% after appearing to have reached a peak in 2016, before posting the 8% rebound in 2018. After surging 23% in 2016, commercial building starts have shown slight improvement, edging up 1% in both 2017 and 2018.

“The brisk expansion for the U.S. economy during 2018 enabled market fundamentals for commercial building and multifamily housing to strengthen, after having shown some erosion during the previous year,” said Robert A. Murray, chief economist for Dodge Data & Analytics. “This provided the backdrop for the healthy volume of commercial and multifamily construction starts that took place during 2018. A further boost came as a number of very large projects reached groundbreaking last year.”

The Mogharebi Group completed the sale of Paradise Apartments in Chico, Calif., a164-unit community, located on West Sacramento Avenue for $18,200,000. The price breaks down to  $110,976 for each unit or $143 per square foot. The buyer was a private investment group out of Calabasas, Calif., that specializes in student housing.

“Due to the attractive price per unit, there was strong interest in the Paradise Apartments,” says Otto Ozen, executive vice president of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients and student housing investors.”

Otto Ozen, Alex Mogharebi, and Bryan LaBar of TMG represented the seller, an investment group, as well as the buyer.

Built from 1974 to 1988, Paradise Apartments, a two story apartment community, comprises 34 residential buildings with 127,572 rentable square feet, situated on 15.1 acres. The apartments features one, two, three, and four-bedroom units.

Fannie Mae has increased the loan limit of small multifamily mortgage loans to $6 million, from $3 million or less nationwide and $5 million or less in high-cost markets. The objective was to ensure an adequate supply of affordable housing.

The changes will simplify the definition of a small loan and provide more opportunities for borrowers to realize the benefits of streamlined third-party report, underwriting and asset management requirements, according to Fannie Mae. The increase in the small mortgage loan limit is effective immediately and the higher loan amounts will be offered across the U.S.

"Increasing the loan limit for our small mortgage loan program will provide more capital and liquidity to the small loan marketplace and help address the significant affordable workforce housing supply issues facing our country today," said Michael Winters, vice president, multifamily customer management for Fannie Mae. "Our commitment to providing sustainable financing solutions that enhance affordability, security, and convenience of financing smaller properties plays an important role in securing a key source of housing for working families."

In addition to increasing the small mortgage loan size limit, Fannie Mae has added several new eligible markets that receive pricing and underwriting benefits. The new metropolitan statistical areas are: Denver, Miami, Minneapolis, and Salt Lake City. These markets have seen credit and economic performance that is comparable to the metropolitan statistical areas that are in the program, including Baltimore; Boston; Chicago; Los Angeles; New York City; Oxnard, Calif., Philadelphia; Portland, Oregon, Sacramento; San Diego; San Francisco; San Jose; Seattle; and Washington, DC.